The Four Most Popular Myths About Paid Advertising: Debunked

September 12, 2017

Is paying for AdWords worth it? Well, yes and no.

To someone unfamiliar with pay-per-click (PPC), opening the Google AdWords dashboard might look like a seven-headed monster that no entrepreneur can slay. I saw this time and time again during my time at Google. It’s a big reason why my co-founder and I decided to start AdHawk in the first place.

AdWords is complicated and can be overwhelming, which means there is a lot of misinformation floating out there and plenty of myths that call for some debunking.

We at Adhawk have had thousands of conversations with clients and potential clients about these myths, so I’m going to put the most common ones to rest today. Let’s get debunkin’.

Myth No. 1: The top ad position is always the best.

It’s automatically assumed that the first results are going to give you the most return for your money, but that’s not necessarily true.

A study by Hallam Digital found that while the top position drove the most clicks, the second and third positions drove three to four times more conversions, respectively. They conclude that providing useful information, optimizing your landing page, adding extensions, using relevant copy and improving your overall quality score should always be a higher priority than anything else.

They further suggest that the second and third results receive more high-quality clicks because the first position draws in a mass audience, many of whom are not qualified to drive that coveted conversion.

If your ad is not in the first position and you’re still driving conversions, budgeting correctly and turning a profit, then so be it. This brings me to the next myth.

Myth No. 2: Every business needs to double down on PPC advertising.

PPC is more effective for some businesses more than others, but what it really boils down to is budgeting. Brett Farmiloebreaks it down into these three easy formulas:

(Revenue / Sales Period) / Average Sale = Number of Customers

Number of Customers / Conversion Rate = Number of Leads

Number of Leads / Conversion Rate on Traffic = Amount of Traffic

What this means is that if the price to acquire a customer is greater than the customer’s lifetime value, PPC is not worth it for you.

This might be the case for low-traffic and high-competition industries, where PPC advertising may cut margins and not scale.

Myth No. 3: You don’t need PPC if you have high-ranking organic content.

Organic strategies like SEO, social and email go hand in hand with PPC strategies. If you have the bandwidth and resources to execute, do all of them.

Building organic traffic is a great strategy that will pay off in the long run. That being said, managing and updating your SEO efforts after every Google algorithm update can start to feel like a never-ending game of whack-a-mole. The advantage of PPC advertising is how quickly it can be spun up to scale your business, and the relative stability it brings to the table.

The numbers speak for themselves. Paid search results drive 1.5 times more clicks than organic traffic, primarily because paid spots drive traffic to customized landing pages. Organic content is a great way to generate an audience, but if you want a predictable and direct method of acquiring customers or driving conversions, PPC is the way to go.

If you already have high-ranking content, you can double-rank on Google by creating paid ads for the same keywords your organic content ranks for. That’s double the real estate and double the chances for conversions.

This means Bing has a different user base than Google, which can provide a profitable opportunity to reach a new audience. For Search Engine Watch, driving conversions on Bing proved to be 63.23% cheaper than on Google.

The next time you hear one of these myths, share your newfound myth-busting knowledge with a friend, or tweet at me @AdHawk.